HSBC Infrastructure Report: Asia Will Boom

China, India, Malaysia & Vietnam All Big Users, U.S. Manufacturers Big Winners

Oct. 11 – According to the recently released HSBC Global Connections Trade Report, emerging markets are expected to be the cause of a surge in infrastructure trade. The report analyzed 23 countries and anticipates infrastructure-related trade to increase by an average of 9 percent per annum, accounting for 54 percent of total global exports by 2030. Infrastructure trade includes goods needed for infrastructure projects and investment equipment, such as sophisticated machinery businesses need to increase productivity.

“The investment that countries are making in infrastructure is phenomenal and provides a huge opportunity for businesses looking to grow and develop. Rising middle classes across Asia’s rapidly emerging markets will drive significant infrastructure demand in the region,” said James Emmett, the global head of trade and receivables at HSBC.

This trend will open many doors in Asia. India will replace the United States as the largest importer of equipment for domestic infrastructure projects by 2020, as it invests $1 trillion in transportation networks, power plants, ports and airports. Meanwhile, as China moves up the value-added chain, it is set to surpass the United States as the largest importer of investment machinery by 2030. In 2013 alone, almost half of China’s imports have come from goods for infrastructure and investment equipment: a trend that will continue in the coming decade.

ASEAN countries such as Malaysia, Indonesia, and Vietnam will also increase their share of infrastructure related imports, with Vietnam anticipating double digit annualized trade growth between 2012-2030. Companies based in developed economies will have the opportunity to supply specialist machinery, while exporters based in emerging markets can supply infrastructure goods.

“The HSBC report merely underlines what we have been seeing at the recent APEC meetings – Asia will boom and will also require huge amounts of infrastructure,” comments Chris Devonshire-Ellis, Founding Partner of Dezan Shira & Associates. “Foreign MNC’s from Europe and the United States need to get themselves well positioned in the Asian market to take advantage of what will be a huge growth trend over the next thirty years: developing Asia to contemporary standards. China was just the start compared to what will happen.”

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